Adding to the recent string of subject-matter eligibility patentability cases (35 U.S.C. § 101), the U.S. Court of Appeals for the Federal Circuit upheld the invalidation of an invention directed to automating credit applications for car loans. Dealertrack, Inc. v. Huber, Case Nos. 09-1566; -1588 (Fed. Cir., Jan. 20, 2012) (Linn, J.) (Plager, J., concurring-in-part and dissenting-in-part).
At issue were patents relating to automating the process of receiving credit application data from a car dealer, processing and conforming that data according to bank forms for credit loans, forwarding the conformed loan applications to selected banks and receiving answers from the selected banks. In the relevant claims, this computer automation is recited in the preamble as “[a] computer aided method of managing a credit application.”
Relying on the Federal Circuit decision CyberSource (see IP Update, Vol. 14, No. 9), the district court ruled that the claims did not recite patent-eligible subject matter under § 101. The court concluded that the computer recited in the claims was not specially programmed and was nothing more than a general-purpose computer to be programmed in some unspecified manner. Dealertrack appealed, arguing that the “computer-aided” limitation in the preamble sufficiently limits the claims to an application of the idea for facilitating credit applications.
The Federal Circuit disagreed. The Court distilled the claim as reciting a basic concept of processing information through a clearinghouse, akin to the “basic concept of hedging” in Bilski. (see IP Update, Vol. 13, No. 7) Citing CyberSource, the Court distinguished its recent Ultramercial decision (see IP Update, Vol. 14, No. 10), which found a practical application with concrete steps requiring an extensive computer interface. In contrast to the claims at issue in Ultramercial, the Court found that Dealertrack’s claims recite only that “the method is ‘computer aided’ without specifying any level of involvement or detail.”
Judge Plager dissented, concluding that the Court should decline to analyze subject-matter patentability issues in the first place, where other another basis—§ 102 or § 103—could have been used. Judge Plager would have the Court decide § 101 patentability only when necessary, in accordance with efficient judicial process, to avoid “foray into the jurisprudential morass of § 101 unless absolutely necessary.” In a responsive footnote, the majority cited the Supreme Court’s Bilski decision as characterizing § 101 eligibility as a “threshold test.”
Other points of interest include the Court’s interpretation of “i.e.” and “that is” phrases to introduce examples, not lexicographical definitions, and the Court’s disagreement with the district court that the claimed “communication medium” excludes the internet.
Practice Note: The ability to effectively claim computer-implemented methods is getting more unsettled. The notion that simply adding a computer to render software steps patentable has been dispelled. Practitioners should strive to disclose (and claim) specific computer functionality to fall under the Ultramercial holding if claiming a computer-implemented process.